Commbank’s latest mobile banking app opens up tap-and-go payments for Android phones, replaces the need for a pay sticker for phones, and launches a further assault on cash payments. But it is now a clunky process. 16-digit number of a credit or debit card with a 16 digit unique token to secure each transaction. Use of contactless payments is fuelling strong growth in digital payments.

Google introduced HCE in version 4. While the Commonwealth Bank is the first local bank to offer the service, Westpac New Zealand has been trialling HCE since mid 2014. Cuscal and CUA launched the redi2PAY service which relies on HCE, in July. Lisa Frazier, executive general manager for digital channels at the Commonwealth Bank said that to use the contactless payment capability users would launch the app, see details of the payment on their screen and input a PIN, then pass the phone over a payments terminal to complete the transaction. She would not be drawn about Commbank’s plans for smartwatch apps. Besides extending the reach of its digital wallet solution the announcement lobs another grenade at cash which is feeling the heat from a range of digital payment solutions.

ANU economics professor Rabee Tourky earlier this month predicted that cash as we know it would be phased out within a decade, and replaced by electronic alternatives, including a Government backed virtual currency. Money will not disappear – but cash in a paper form will disappear. You can exchange Bitcoin without a bank or a third party. The advantage is that you can make very small and very large payments with almost zero fees,” said Tourky. The Australian government will certify and issue a trusted digital cash. The Reserve Bank declined to comment on such a possibility, but in its submission to the Senate inquiry into digital currency, noted that uptake of virtual currency was slow and had thus far no significant implications for the RBA’s ability to manage monetary policy.

Governor Glenn Stevens has however previously noted the displacement impact of contactless payments on cash. In a speech to the Australian Payments Clearing Association last October Stevens said however that the uptake of digital wallets had been slower than expected – but acknowledged that could change rapidly as new solutions emerged. Frazier said demand for mobile banking was exploding. She said Commbank’s user base has grown from 1. 76 million a year ago, to 3.